America's 5 Most-Affordable Housing Markets

Winning a place as one of the nation's most-affordable cities starts with having plenty of buildable land.

BOSTON ( TheStreet) -- Attention cheapskates -- here's a look at U.S. five cities you can move to or invest in and find some of America's most-affordable homes relative to local incomes.

"A city that grades well in our study is a place where you can get a bigger, nicer home at any price point than you can in a city that grades poorly," says Mike Sante of Interest.com, which recently analyzed housing affordability in the nation's 25 largest cities. "For $200,000, you can buy yourself a pretty nice house in Atlanta -- but what can you find for $200,000 in New York City?"

To find the best bargains, Interest.com calculated how much you'd pay each month for a median-priced home in each city, assuming you put 20% down and got a 30-year fixed mortgage that charged the local average interest rate.

Next the site added median local property taxes and homeowners insurance premiums and looked at whether a family earning a given city's median household income could meet the "28% rule." That standard, which many lenders use when deciding whether to OK a mortgage, looks at whether a borrower can pay all monthly housing costs using no more than 28% of gross income.

Interest.com found that consumers in highly affordable cities need barely half of median household income to meet the 28% rule, while those earning median incomes in high-priced locales fall way short.

That doesn't surprise Sante.

"The real estate industry keeps saying how prices are down, mortgages are cheap and homes are incredibly affordable, but our study shows that housing is composed of lots of different local markets," he says. "If you're sitting in New York, you're saying: 'I still can't afford a home here. Not much has changed.'"

Sante says the nation's most-affordable cities all have plenty of buildable land, unbound by the oceans or mountains that constrain new construction in costly locales such as San Francisco.

Click below to check out the five cities Interest.com found have the most-affordable home prices relative to their local median incomes.

The site calculated affordability using median single-family-home prices as of the second quarter; 30-year fixed-mortgage rates as of Sept. 19; median household incomes and property taxes as of 2011; and average annual homeowners insurance premiums as of 2009.

"Above-average" and "below-average" figures refer to the average of all 25 cities analyzed -- $50,502 for incomes, $2,331 for property taxes and $880 for insurance premiums. "Average home prices," though, refer to the $229,516 median found in a larger pool of locations that the National Association of Realtors tracks.